Canadian bank industry overview part 5

Description of banks

Laurentian Bank is a Quebec based banks with activities that extend toother regions in Canada. It was founded in 1846.
The banks has 43 billionin assets.

Manulife Bank
Established in 1993, Manulife Bank of Canada (Manulife Bank)was the first federally regulated bank opened by an insurance company inCanada. It is a wholly-owned subsidiary of Manulife Financial.
Residentialmortgages, are its bread and butter.

Tangerine description

Tangerine was launched as a virtual bank, ING DIRECT Canada, in 1997.
InNovember 2012, Scotiabank completed its acquisition of ING Bank, aNetherdands based bank which had been impacted by the credit crisis.Rebranded Tangerine, this is a no-fees bank.

Cost of Funds (COF)

Surprisingly the cost of funding for Laurentian and Manulife Bank wassignificantly higher than Tangerine. This is surprising because at thescale of the mid-large size banks you would expect efficiencies to beoptimized. However, Laurentian with a COF of 1.74 per cent compared to .67per cent for RBC, this has an impact on its NIM and obviously on itsincome.

This is surprising because at the scale of the mid-large size banks youwould expect efficiencies to be optimized. However, Laurentian with a COFof 1.74 per cent compared to .67 per cent for RBC (Tangerine similar), thishas an impact on their NIM and obviously on its income.

Loan lease growth

Within the mid-large group, you can see how Laurentian has consistentlygrown its loan portfolio since 2007. However, if you compare this to theloan growth of RBC, you can see that the entire group has beenout-performed.

Net interest margin

The NIM for for Manulife and Laurentian is similar, dispite the higher COFfor Laurentian Bank. The explanation for Tangerine, which has a much lowercost of funds, comparable to RBC, in fact, is due to the acquisition of INGCanada by Scotia in 2012, which has impacted its cost of funds. Essentiallythis has led to Tangerine having a NIM of 4.08 per cent. Double the NIM forRBC in 2016.